Black Friday sales rose, but more discounts loom

Staff Report
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Dec 1, 2008 at 12:00 AM

According to a report inBusinessWeekat 3 a.m. on Black Friday, Eric Sjoberg, 29, wasn't camping outside a store in a long line to get first dibs on the "door-buster" discounted items that have come to characterize the day that traditionally kicks off the holiday shopping season. Instead he was picked up from his home by a limo from electronics retailer Best Buy (BBY) and transported to a nearby store in Needham, Mass. There he was greeted by cheering employees and let into the store at 4:30 a.m.-a half-hour before it officially opened. Sjoberg purchased a 50-inch plasma-screen TV, a laptop, and several DVDs, exiting just as the crowds stormed in.

"This Black Friday was an opportunity to make the holiday very special for our family on a tight budget," said Sjoberg, who had won a VIP Black Friday contest run by Best Buy.

Such over-the-top treatment shows just how desperate retailers are to grab what shoppers they can in what is shaping up to be their most difficult holiday shopping season in decades. In one sense, the deep discounts and heavy promotions for Black Friday worked: More than 172 million shoppers around the country visited stores and retail Web sites during the post-Thanksgiving weekend, up from 147 million last year, according to the National Retail Federation.

But few stores are celebrating. Sales growth was anemic: Shopper Trak, a firm that follows mall traffic, reported that Black Friday retail sales totaled $10.6 billion, up 3% from a year earlier, compared with 7% growth for the same period in 2007. And with so much price slashing, many of those sales probably won't generate profits. Consider that Sears Outlet was throwing in a free washer for every $700 dryer sold, and Old Navy (GPS) had scarves and hats discounted to $1.00.